Some of the employees, those in Yahoo’s Santa Monica and New York
offices, sat at their desks watching a video feed on their
computer monitors.

At Yahoo’s headquarters in Sunnyvale, California, just off US 101
in the heart of Silicon Valley, almost two thousand employees sat
in a huge cafeteria.

The sunlit, windowed cafeteria was called URLs. It was named that
because, when Yahoo was founded almost 20 years before, all it
did was serve up URLs, website addresses. The earliest version of
Yahoo was a directory of links on a gray web page with a friendly
logo up top.

The name also worked because URLs sounded like Earl’s, and that
suited the cafeteria’s 1950s diner motif. Walking into the
cafeteria, you see a sign that reads: “Eat at URLs.” The sign is
one whimsical touch among many in Yahoo’s headquarters. The
campus is called the Hoo. The employees call themselves Yahoos. A
statue of a purple cow greets visitors in the lobby. There’s an
exclamation point at the end of every Yahoo logo.

The mood of Yahoo employees that day in November 2013 was not
whimsical.

Some of the people in the room were angry — angry about refused
promotions and pay raises, angry that their jobs now seemed to
entail an endless series of tasks done only because “Marissa said
so,” or angry that new employees were coming into the company and
making a lot more money. They were angry because, to them, it
seemed like Marissa Mayer had said one thing and done another.

Most of the gathered Yahoo employees and executives weren’t so
mad. They were just confused. They believed Mayer was brilliant,
hardworking, and sincerely interested in the welfare of Yahoo,
its employees, and its users. They’d decided this after Mayer
came to Yahoo from Google in July 2012 and brought with her
sweeping changes that reenergized the entire company.

Before Mayer joined, Yahoo’s parking lots were empty for the
weekend by 4:30 p.m. Thursday. It took years for Yahoo to refresh
its products, while competitors took months or just weeks.
Yahoo’s apps for Android and iPhone were embarrassing.

Within weeks of Mayer’s arrival, the lots were packed and the
headquarters was humming till Friday evenings. Within months,
Yahoo was launching products at a pace it hadn’t hit in more than
a decade. Within a year, Yahoo was winning awards and praise from
the press for its product design. By the summer of 2013, tens of
thousands of people were applying for Yahoo jobs every quarter.
Yahoo finally had a team of hundreds working on apps for
smartphones.

Now, in November 2013, the many Yahoos who had admired all
Mayer’s progress wondered: Why was Mayer throwing away all the
goodwill she had earned with a series of policies that were, at
best, poorly rolled out and badly explained to employees or, at
worst, plain mistakes. They wondered, more seriously than at any
time since she joined, if Mayer was actually up for the job of
saving Yahoo.

Mayer sat in front of them all, in a chair on a stage at the far
end of the cafeteria. Next to her chair was a small table. Mayer
had something with her. It looked like a book or a folder with an
illustration on it.

A couple months before, fashion magazine Vogue published a photo
of Mayer. In the photo, Mayer was lying upside down on a chaise
lounge. Her blond hair was neatly fanned out and shiny like white
gold. She was wearing a form-fitting blue Michael Kors dress,
Yves Saint Laurent heels, and dark red lipstick. Her eyes held
the camera, gazing sideways through half-closed lids.

That Thursday in November, Mayer looked like a different person.
She looked agitated. Nervous. Her hair was wet. She wore no
makeup.

Mayer knew about the confusion and the anger in the room. She’d
been reading about it all week.

One of Mayer’s first moves after joining Yahoo was to institute a
weekly Friday afternoon meeting of all Yahoo employees, called
FYI. The point of the meetings was to bring “radical
transparency” to a company where, for many years, employees had
to learn about what management was up to by reading the press —
mostly reports from a journalist named Kara Swisher.

FYI meetings would begin with a confidentiality reminder. Mayer
would announce new hires and work anniversaries. Then she would
go over Yahoo’s “wins of the week.” Mayer or another executive
would go into “deep dives,” giving presentations on topics like
why Yahoo had acquired a certain company or how a new Yahoo
product worked. At the end of the meeting, Mayer would take
questions from Yahoo employees and either answer them herself or
ask one of her direct reports to squirm in the spotlight.

Sometimes the questions would come in live from a Yahoo employee
holding a microphone in URLs. More often, the questions were
submitted during the week leading up to the FYI through an
application called “Yahoo Moderator” on Yahoo’s internal network.
Everyone in the company could see questions after they were
submitted, and employees would vote on which questions they
wanted Mayer to answer that week.

Over the next year, employees asked Mayer tough questions on
confidential topics, and she — or one of her top executives —
would answer them with surprising candor. A popular topic: the
status of layoffs and reorganizations reported on by the press.
Another: Why was she blocking so many good hires? Whenever Yahoo
spent millions of dollars to buy a startup, employees would
demand an explanation from Mayer.

Finally, one Friday in October 2013, someone asked Mayer if she
would do an FYI where the questions were submitted anonymously.
Mayer said yes.

When the questions came in, they were so brutal that Mayer
decided not to wait until a Friday to address them.

So now it was a Thursday: Nov. 7, 2013. Everyone in the company
was waiting for Mayer to say something to remind them that she
was the CEO who was finally going to restore Yahoo to its
rightful place in the internet industry.

Mayer took a breath. She said hello to everyone. She reminded
them of the meeting’s confidentiality. She said she looked
through their questions and she had something she wanted to read.
It had been a book in her hands, after all. A children’s book.

The book Mayer read to
Yahoo employees in November 2013Bobbie Had a Nickel

She began to read.

"Bobbie had a nickel all his very own. Should he buy some candy
or an ice cream cone?"

The irony is, the only reason Marissa Mayer had to explain
herself to a roomful of demoralized and confused Yahoos that
Thursday in November 2013 was that, a year before, she decided
not to fire 5,000 of them.

Actually, Mayer had to make that choice three times.

When she joined Yahoo in the summer of 2012, one of the first
meetings she took was with a company executive named Jim Heckman.
Heckman had been a top dealmaker for the interim management team
that had immediately preceded Mayer. In that meeting, Heckman
told Mayer that he had deals lined up with Google, Microsoft, and
a New York advertising technology company called AppNexus. The
plan was to outsource various Yahoo functions to each. Then Yahoo
would be able to get rid of as much as a third of its headcount.

Within a day of the meeting, Mayer canceled all the deals and
asked Heckman to leave the company.

Then Mayer had to decide what to do about Project Alpha.

Project Alpha was the code name for a massive overhaul of Yahoo
begun by another one of Mayer’s predecessors, Scott Thompson.
Thompson had been Yahoo CEO for only a short time — from January
2012 to May 2012 — but Project Alpha was going to leave a mark.
It called for Yahoo to reduce its number of data centers from 31
to six and its workforce of 15,000 employees and 3,000
contractors by as much as a third. Thompson initiated Project
Alpha on April 4, 2012. When he did that, hundreds of Yahoo
employees were told that eventually they were going to be fired,
but not just yet. This was called getting put “on transition.”

Project Alpha sought to reduce Yahoo’s workforce by cutting whole
divisions from the company rather than by examining the work of
each employee in each group and identifying the poor performers
who should go and the high performers who should stay, even if
that meant moving to another group. When Mayer heard that, she
couldn’t believe it. She quickly reduced the scope of Project
Alpha and asked her top executives to recruit back into the
company high-performing Yahoo employees that Thompson had put on
transition. At an FYI on Sept. 28, 2012, Mayer told employees
that Thompson’s plans had damaged Yahoo’s culture and that she
wouldn’t be using the same kind of cost-cutting tactics.

Finally, Mayer had to deal with the board, which also wanted her
to fire lots of Yahoos.

When Yahoo’s board of directors hired Mayer in July 2012, the
directors made clear to her that they thought she should cut
headcount by as much as 35% to 50%.

Mayer seemed to get the idea but made no promises in her
interviews for the job. She did, however, agree that Yahoo needed
to reduce its costs and focus on making fewer products better.
She said that by her first board meeting, in September 2012, she
would present a cost-cutting strategy.

The notion that Yahoo needed to fire a lot of its people was
conventional wisdom within the industry by the time Mayer took
over in summer 2012. The week of her hire, Marc Andreessen, a
widely respected startup investor who had been part of a private
equity group that looked at buying Yahoo in 2011, told a reporter
that Yahoo should fire 10,000 to 12,000 people.

So when that board meeting came in September, several directors,
including hedge fund manager Dan Loeb, the director most
responsible for Mayer’s hire, expected her to present a plan for
layoffs.

That’s not what Loeb and the rest of the board got. Mayer told
them that layoffs of any kind, let alone 35% to 50% cuts, would
be too damaging for employee morale. She said that Yahoo’s basic
infrastructure was so byzantine and jerry-built that it would be
unwise to blindly rip whole teams of people out. She said Yahoo
was going to need all the talent it could find to turn around,
and she didn’t want to risk putting good people on the street.

Many of the directors, including Loeb, didn’t like what they
heard, and there was some tension in the room. But they’d just
made a huge bet on Mayer only months before, and there was no
choice but to go with her plans.

Mayer was thrilled.

On Oct. 12, 2012, Mayer got the chance to share the good news,
when, at an FYI, an employee asked if reports about layoffs were
true.

Mayer, standing onstage in front of a giant purple curtain
backdrop, said, “So are there secret talks going on about massive
layoffs and massive reorganizations?

“Have I had
conversations with people about them?

“No.

“Is this something that weighs on me?

“Yes.

“You probably have heard and seen some of the comments from Marc
Andreessen and others about how many people might need to be laid
off. Have I heard some of those?

“Yes.

“Do they weigh on me?

“Yes.

“Have I been actively considering plans around them?

“No.

She said that Yahoo would still have to make some changes, but
that she wanted them to be “small.”

“As of right now, we’re not looking at layoffs. We’re looking at
stabilizing the organization. I can’t make a promise that there
won’t be a change in that in the future, but as of right now,
there’s no active planning or conversations going on.”

Then Mayer said something about how Yahoo would get “fit as a
company” by setting goals and then using those goals to measure
“who’s performing well” and “who’s struggling.” Few in the room
thought much about what she meant by that. What they heard Mayer
saying was: I’m not going to fire you, your friends, or 10,000
other people.

The Yahoos started clapping.

Mayer liked the applause.

“You should feel good about that,” she said. “That should be a
giant round of applause, a big sigh of relief from everybody.”

Mayer told employees there
would be no layoffs, and that she expected "a big sigh of relief
from everybody.”Fortune Live Media /
Flickr

- - -

Even as Mayer decided not to fire 5,000 or 10,000 people during
the fall of 2012, she still wanted to figure out some way to cut
costs, or at least control spending, at Yahoo.

She had to.

Since joining, she’d discovered that Yahoo had even more workers
than the headcount of 15,000 it published in its reporting to the
SEC. There were also another 3,000 contractors around the globe,
working what were essentially full-time jobs, just without the
benefits. Meanwhile, Yahoo’s actual full-time employees had been
getting paid more than the industry average for many years. In
the tumultuous years leading up to Mayer’s arrival, prior CEOs
had given employees fat raises and big bonuses in an effort to
keep them from leaving the company.

Mayer knew she needed to tighten the belt in 2013. Mayer also
believed that the company’s workforce needed to get more
talented. That meant recruiting and retaining high performers and
flushing the poor performers out.

Mayer believed she had a plan that could achieve both goals at
once.

The plan hinged on bringing into Yahoo a management technique
Mayer learned at Google.

Starting in 1999, Google management used a system called
Objectives and Key Results, or OKRs, to measure the effectiveness
of its employees, divisions, and the company overall. The idea
for OKRs came from Google investor John Doerr, the famous venture
capitalist. Doerr got it from Andy Grove, who developed a similar
system called Management by Objective during his successful run
at Intel.

A slide from John Doerr's deck on OKRs at
GoogleScreenshot

In the OKR system, every Google employee would come up with a
list of quantifiable goals every quarter. The employee would
present this list to a manager for sign-off, then the approved
goals would be entered into Google’s internal network, where
everyone in the entire company could see them. The next quarter,
the employee would meet with the manager again, review their
performance, and get a score on their OKRs. That score would
determine the employee’s bonus payment and ability to get a
raise, a transfer, or promotion within the company.

Starting in September 2012, Mayer introduced a clone of OKRs to
Yahoo. She called them Quarterly Performance Reviews, or QPRs.
Employees from Mayer’s direct reports on down would get a score
every quarter, from one to five. A one meant the employee
consistently “misses” goals, a two meant the employee
“occasionally misses,” a three, “achieves,” a four, “exceeds,”
and a five, “greatly exceeds.”

Mayer rolled out her cost-cutting, talent-improving plan in
stages. First, she introduced the concept of goals to employees.

Then Mayer announced a “target distribution” for the company.

In effect, a target distribution meant Mayer wanted managers to
put a certain percentage of the employees they managed in each of
the five buckets. Ten per cent would go into “greatly exceeds,”
25% in “exceeds,” 50 percent into “achieves,” 10 percent into
“occasionally misses,” and 5% into “misses.”

Then Mayer rolled out new policies wherein employee eligibility
for bonuses, promotions, and transfers within the company would
be based on their average score for the past three quarters.
Employees with low enough scores would be asked to leave the
company.

Over her first year, the plan seemed to work — or at least
accomplish Mayer’s two goals for it. Mayer felt Yahoo’s talent
level was rising. And, without going through any morale-draining
layoffs, Mayer was able to move 600 low-performing employees out
of the company.

Unfortunately for Mayer, the plan also produced a few unintended
consequences.

- - -

In August 2012, Vanity Fair published a story by Kurt Eichenwald
about the downfall of Microsoft over the prior decade. In the
story, Eichenwald attributed Microsoft’s woes to all sorts of
issues, but he said company insiders blamed one Microsoft
management system most of all: a process called stack ranking.
Also known as “the performance model,” “the bell curve,” or “the
employee review,” the system forced Microsoft managers to rank
the people on their teams from best to worst, with a fixed
percentage going into each of five buckets: top performers, good
performers, average performers, below average, and poor.
Employees ranked poorly would see their lives materially turn for
the worse as they lost out on raises, promotions, and bonuses.

Many say Steve Ballmer
failed at Microsoft due to stack-ranking.Microsoft

As if writing an indictment, Eichenwald listed out the negative
consequences of the well-intended system. Because someone would
have to be ranked worst even on teams full of all-star
performers, Microsoft’s most talented employees refused to work
together. Because employees were not judged on their own work,
but on how well they did relative to their peers, they would
actively seek to undermine each other.

As employee ratings got passed up the management ladder,
individual scores sometimes had to be adjusted at the department
level so that the right amount of employees were in each bucket.
This led to favor-trading between managers. It also meant
employees felt they had to brownnose their boss’s peers and their
boss’s boss.

Stack ranking had come into fashion after GE CEO Jack Welch used
a similar system, called rank-and-yank, to turn around that
company in the 1980s and 1990s. But by 2012, thanks to stories
like Eichenwald’s and several studies, the practice’s limitations
were widely known, even by some at Yahoo.

On Dec. 21, 2012, at the last FYI of the year and shortly after
Mayer began rolling out QPRs at Yahoo, an employee named Carl
Moyer asked Mayer: “Do you think the new bell curve for review
scores has a negative impact on teamwork and morale?

“Knowing that we’re stack ranked against our teammates and that
someone gets the low score seems to incent lack of cooperation.

“Surely no one wants that.”

Mayer told Moyer he misunderstood.

“I want to be clear,” she said. “It’s not a stack rank. It’s sort
of a bucket sort. So you end up either in exceeds, meets,
strongly exceeds, things like that. But it’s not a stack rank. As
a result, I don’t think it has some of the same characteristics
as an actual stack rank.”

Mayer would stick to this semantic line of defense for the next
year. It irritated employees, and even some of Mayer’s direct
reports, to no end. The problem was that while “stack rank” and
“bucket sort” were different words, the systems those words
described had the same effects. Mayer had given the company’s
senior managers orders for how many of their employees could go
into each bucket. These senior managers had then passed down the
ratios to the managers below them. And so on.

It was a forced curve. In general, only 75% of any group got in
the top three buckets. Twenty-five percent of every team had to
go into the bottom two — “occasionally misses” and “misses.” The
result: Teammates directly competed with each other to make sure
that they weren’t a part of that 25%.

Mayer would also say that because her distribution curve called
for 50 percent of Yahoo to fit into the “achieves” bucket, it was
not as “fine grained” as a stack ranking and therefore wouldn’t
lead to as many problems of competition between employees.

Fine grained or not, there were serious consequences for
employees who got stuck in the wrong bucket. To get significantly
ahead in life as a Yahoo employee, you needed to make sure your
grade was better than that of 65 percent of your team colleagues.
Under the new system, the only way to get a promotion or a raise
at Yahoo was to have an average score of three for the past four
quarters. You could get an “exceeds” for three quarters and an
“achieves” for one, and you’d land below the threshold. No raise
for you. Good luck next time.

Lots of Yahoo employees at all levels understood that the company
needed to be tighter with its compensation. Anyone who did a
little research would find out that Yahoo engineers got higher
salaries than counterparts at rival tech companies.

But one thing bothered Yahoo’s engineers about the
cost-consciousness when it came to take-home pay: It didn’t seem
to apply to everyone.

The rumor was that Mayer was paying people from her old company,
Google, massive salaries to get them to join Yahoo. They’d
whisper to each other: Was it true that ex-Googlers were getting
paid $300,000 on average?

Also, Yahoo kept acquiring small, failed startups as a way of
quickly hiring whole teams into the company. Word was, the mobile
engineers on those teams were getting three-year deals worth $1
million.

As 2013 rolled on, Mayer’s system made life particularly
difficult for Yahoo’s middle managers. It was hard to get
talented people to work in the same group. Not only did people
not want to compete against other talented employees, they also
worried that if they transferred in the middle of a quarter,
they’d whiff on their goals, get a mere “achieves,” and lose out
on a chance for a raise anytime in the next 12 months.

Workers would prioritize tasks that got them closer to their
personal goals over doing anything else. This made sense.
Collaborating and helping out on a project that wasn’t going to
get you closer to an “exceeds” was just a stupid thing to do.

The worst part was, every quarter, managers would guide their
teams toward collective goals, and then, even if all of those
goals were met, they had to single out a few people and tell them
they had missed expectations. Occasionally, a middle manager
would quietly rebel and file a packet of QPRs to Yahoo human
resources that listed each employee as an “achieves” or better.

But HR would kick the packet back and tell the manager to get
their calibrations right. Somebody always had to “occasionally
miss.” Even if no one ever missed.

One ugly part of the process every quarter was a series of
so-called “calibration meetings.”

In calibration meetings, managers would gather with their bosses
and review all the employees under their watch. Then the managers
and their bosses would adjust the scores of those employees so
that the department as a whole had the right amount of people in
each bucket—10 percent in “greatly exceeds,” 25 percent in
“exceeds,” and so on.

What went down at these meetings was not what Mayer had intended.
Mayer wanted employees to be rated objectively against the goals
they’d agreed on with their managers at the beginning of every
quarter. What happened instead was that managers would sit there
and look at an employee that needed to fit into a particular
bucket and try to think up reasons why they fit there.

Sometimes the reason would be a political one. Managers would
strike bargains—agreeing to rate certain employees in one
another’s groups higher and employees in some other manager’s
group lower, so that the curve fit.

At one calibration
meeting, Kathy Savitt said of another exec: “He just annoys me. I
don’t want to be around him.” He was soon gone from the
company.Lockerz

Sometimes the reason would be more superficial. That employee ate
lunch with the right people or could hold a conversation with the
boss in the hallway? Exceeds. This one shuffled around and kept
to himself? Occasionally misses.

The senior executives who reported to Mayer, known collectively
as her E Staff and called L2s (Level Twos), would join her in a
meeting room called Phish Food on the executive floor of building
D on Yahoo’s Sunnyvale campus. There, they would go over the
names and ratings of L3 and L4 executives.

There would be a bunch of people sitting around a table holding
spreadsheets of names and ratings. If the name of an L3 that was
unfamiliar to Mayer came up, the rating would usually stick. But
if she knew the name of a person and could recall an interaction,
that person’s rating would go up or down based on how that
relatively trivial interaction had gone.

At one such meeting on October 26, 2012, the name Vivek Sharma
came up. At that point, Sharma was working with Mayer on a major
redesign of Yahoo Mail, a project code-named Quattro.

Several hundred million people use Yahoo Mail every month, and
Quattro represented a major turning point for the product, but
that’s not what finally determined Sharma’s rating at the
meeting.

An L2, Yahoo chief marketing officer Kathy Savitt, said, “He just
annoys me. I don’t want to be around him.”

Savitt didn’t really need to be around Sharma much, as he worked
in Yahoo’s product organization and had relatively little
interaction with marketing.

But Mayer agreed with Savitt.

She docked Sharma’s rating, which inevitably decreased his
take-home pay for the year. In January 2013, Sharma left Yahoo
for a senior position at Disney.

- - -

In November 2013, Yahoo
employees asked Mayer some very hard
questions.REUTERS/Denis
Balibouse

Throughout Mayer’s first year at Yahoo, QPRs and complaints about
the calibration system came up often at Friday FYIs. Even at the
otherwise celebratory FYI just preceding Mayer’s one-year
anniversary, someone asked about the “demotivating” nature of the
program.

Then, in October 2013, Mayer agreed to let employees ask
questions anonymously. Finally given the chance to vent without
fear of repercussions, employees submitted hundreds of angry
questions.

One question got 1,531 votes from employees, making it the first
one Mayer read.

I was forced to give an employee an occasionally misses, [and]
was very uncomfortable with it. Now I have to have a discussion
about it when I have my QPR meetings. I feel so uncomfortable
because in order to meet the bell curve, I have to tell the
employee that they missed when I truly don’t believe it to be the
case. I understand we want to weed out mis-hires/people not
meeting their goals, but this practice is concerning. I don’t
want to lose the person mentally. How do we justify?

Eight more questions had more than a thousand votes.

"Could you please address why managers are forced to have an
average rating for their team? If everyone on the team
exceeds expectations, the manager is not allowed to rate each
member as such."

"The salary of many of current Yahoos (joined before Marissa
joined as CEO) needs to be normalized with that of
new/returning Yahoos. I’m a manager and was asked to give a
salary which is at least 20–30 percent high[er] than that of
what other employees in my team with similar experience are
making, so approval goes through hiring & executive
committee. When I asked if there is a way I can increase
[the] salary of my current employees, there was no proper
answer from management or HR. Can this be addressed?"

"[Is it] true that we will cut 20% of the work force in a
silent layoff based on QPR results?"

"Based on my experience, I don’t feel like the process was
done correctly nor was I treated fairly. My former manager
did not provide feedback or guidance, other than to say that
higher-ups decided the numbers and he had no input.
Considering how important these ratings are, can we have a
legitimate appeals process?"

"During the QPR process, is it true that the manager of each
team has to bucket their team members into 1 of the ratings;
below expectations, meets, and exceeds? There has to be a
person at each level? Is it also true that if the individual
receives below expectations 3–4 quarters in a row that they
will be terminated? Is Yahoo using a practice of eliminating
the weakest link? But what if the 'weakest' are only scored
that way because managers are forced to put them there?"

"More often than I’d like, I’m told we are executing a
certain way 'because Marissa said so.' This explanation
leaves out valuable context. There was probably a good reason
for the decision, but that’s absent from this pat answer. Can
we ban the practice of “because [executive] said so” and
encourage people to explain why a specific choice was made
when relaying those decisions to others?"

"The latest round of layoffs affected those with “misses
expectations” on their QPR. I lost a colleague in this last
round of layoffs who had all “meets” from their most current
QPR; they got the axe because of PRIOR misses on their QPR.
Is this a message we really mean to send? That improving
ultimately doesn’t matter because you might get sent to the
guillotine anyways, because of previous performance? Is it
true we force managers to assign some “misses”—thereby
forcing layoffs periodically?"

The last question with more than a thousand votes called for
Mayer to fire some of her executive staff.

Is E Staff subject to the same QPR and calibration process?
Should we expect to see one or two of them departing soon, like
these people leaving now?

On Yahoo’s
internal network, called Backyard, the questions went on like
that for pages and pages.

- - -

On Nov. 7, 2013, the hundreds of people who asked those questions
and the thousands more who voted them up filled Yahoo’s
cafeteria, URLs. In New York and Santa Monica, they waited at
their monitors, hoping to finally hear answers from Mayer.

That’s when Mayer went onstage, sat at her chair, and read a
children’s book to them, holding up the illustrations like she
was a kindergarten teacher and they were all 6 years old. Later,
she would say that she read the book because she wanted to say
that what mattered most in life was experiences, and that her
experience at Yahoo had been wonderful so far.

After reading
Bobbie Had a Nickel, Mayer gave a speech. In a defensive tone,
she stressed, like she always had before, that the QPRs were not
a stack ranking, that there were no stealth layoffs going on at
Yahoo. No one believed her. Her plan had been to cut costs and
improve the mix of talent at Yahoo without damaging morale. Her
plan had failed.

Not everyone in the room opposed Mayer’s QPR system. Some thought
it was a tough, perhaps not very transparent, but effective way
to get the clock punchers out of the company. If it worked for
Jack Welch at GE, it would work for Mayer at Yahoo.

Others looked at the scene around them, reflected on Mayer’s
terrible performance onstage that day — usually a strong point —
and suddenly wondered: Maybe not even Marissa Mayer, with her
incredible work ethic, genius sense of what made an internet
product usable, worldwide fame, and talent-attracting charisma,
would be enough to save Yahoo.

After all, she wouldn’t be the first talented executive to have
tried.

And what made her so different?

- - -

Marissa
Mayer.REUTERS/Kevin
Lamarque

There is no one in the world like Marissa Mayer. In 2012, she was
37 years old, a wife, an expecting mother, an engineer, and then,
suddenly, the CEO of a $30 billion company.

Marissa Mayer is fascinating for her contradictions.

Onstage, in front of hundreds or thousands, she is warm and
charming and laughing. But in a room with just a few others,
she’s cold and direct and impersonal. In a one-on-one she can’t
hold eye contact.

Mayer calls herself a geek, but she doesn’t look the part. With
her blond hair, blue eyes, and glamorous style, she has
Hollywood-actress good looks. She is the frequent profile subject
of fashion magazines, which love her for her Oscar de la Renta
obsession, her femininity, and her implicit feminism. But Mayer
explicitly rejects feminism— and she has shown up to the most
important meetings of her life with wet hair and no makeup on.

Over her decade-plus career at Google and at Yahoo, Mayer
alienated several designers who worked for her because she felt
those designers were not making enough choices based on hard
data. But over and again, Mayer makes her own choices, design and
otherwise, based on little more than an intuition.

Her instincts are often right. They are also often wrong. But,
when Mayer makes mistakes, she makes mistakes fast.

Like many leaders, she expects her charges to follow her
orders—sometimes just because she said so. And yet, no CEO is
more open with employees.

Most CEOs of Mayer’s stature—people running multibillion-dollar
public companies the size of Yahoo — are gregarious, outgoing
types, the kind of person who might have been a politician if the
world of business and money hadn’t beckoned. Baby-kissers.
Backslappers. Schmoozers. Mayer is not that type. Peers from
every stage of her life — from her early childhood days to her
first years at Yahoo—say Mayer is a shy, socially awkward person.
She calls herself “painfully shy.”

Mayer runs a company whose brand is strongest in the middle of
America, and she sits on the board of Walmart. And yet Mayer, who
is also from the heartland and prefers Catalina French dressing
for her salad, would rather Yahoo’s middlebrow media brands be
more like the high-end magazines she loves, such as Vogue or Town
& Country.

Widely admired by the public at large, Mayer has many enemies
within her industry. They say she is robotic, stuck up, and
absurd in her obsession with detail. They say her obsession with
the user experience masks a disdain for the moneymaking side of
the technology industry. Then there is her inner circle, full of
young, wildly loyal men and women.

To a public casually interested in her career, Mayer’s working
life before Yahoo — spent entirely at Google — is remembered as
one success after another. It wasn’t. Mayer started off at Google
spectacularly well, designing its home page, creating its product
management structure, and becoming a face of the company. She was
one of the most powerful people at one of the world’s most
powerful companies. Then, suddenly, she wasn’t. Soon she was
leaving.

Back in the 1990s, Yahoo was the internet. It was founded by a
kid who’d hardly held a job before and another who grew up on a
commune, neither of whom really wanted to make their project into
a business. Then it became a $128 billion company within five
years, dwarfing media conglomerates and technology giants decades
older. But just as quickly as it became the world’s most famous
Internet company, Yahoo crashed to earth during the dot-com bust.
It lost nearly all of its value.

Yet, Yahoo’s users remained loyal to the company and its joyful
brand. For the next decade, dozens of brilliant, hardworking
executives tried to build on that loyalty and restore Yahoo to
its early glory. Some succeeded for spans of time, but none
stopped Yahoo’s slow slide toward irrelevance.

Then, in 2012, came Marissa Mayer — full of contradictions, yes,
but also full of fight.

It’s about the people who ran Yahoo for its first decade and a
half. It goes inside their heads as they make genius moves and
giant blunders.

It’s about the rise and fall of Marissa Mayer at Google. She
joined as a lowly engineer, 24 and shy. Within years, she was
part of a secret cabal that ran the entire company. But she made
enemies along the way and in the end they brought her down.

It’s the story of how Mayer came to Yahoo thanks to a cast of
international players: a smack-talking New York hedge fund
manager, an internet agitator from Canada, a masterful negotiator
in Hong Kong, and a billionaire mogul in Tokyo.

Finally, it’s the story of Marissa Mayer’s race against the clock
at Yahoo. When Mayer joined Yahoo in the summer of 2012, her
timing couldn’t have been better. She joined Yahoo just before
its stock price started soaring due to the company’s investment
in a booming Chinese startup called Alibaba. Investors piled into
Yahoo with little care for how well the core business Mayer was
running performed on a quarterly basis. It was a huge advantage
for Mayer. Unlike most turnaround CEOs, she would have the luxury
of re-tooling Yahoo without having investors demanding immediate
results.

But the cover provided by Alibaba would not last forever
— just two years, until it went public. Then Yahoo would
once again be judged based on the merits of its core business.
Would Marissa Mayer be able to get the company into good enough
shape for its big re-introduction?

At first, the answer seemed to be an obvious yes. Mayer arrived
at Yahoo like a superhero. She was confident and full of ideas,
and for all the world looked like the exact right person for the
job. But thanks to a series of her own mistakes and Yahoo’s
inherent problems, she soon realized she was in for a knock-down,
drag-out fight.